Saville v Insurance and Care NSW

The history of the proceedings

1. The proceedings were originally commenced by way of the filing of the statement of claim on 23 June 2021. Subsequent to the filing of the statement of claim, the defendants pursued motions for dismissal of the proceedings. Those motions were heard by Rothman J on 10 March 2022. By his decision of 24 August 2022 his Honour: 1. struck out the statement of claim pursuant to r 14.28 of the UCPR; 2. granted liberty to the plaintiff to file an amended statement of claim by 4:00pm on 10 October 2022; 3. referred the plaintiff to the Registrar for referral to a barrister or solicitor on the pro bono panel for assistance pursuant to r 7.36 of the UCPR; and 4. ordered the plaintiff to pay the costs of the motions.
2. In accordance with the referral by his Honour, the plaintiff sought legal assistance through the pro bono scheme. As she explained today, she was unable to obtain that assistance in the sense that no-one came forward to represent her in these proceedings.
3. The plaintiff has been legally represented in different proceedings, being originally her workers compensation claim and now a work injury damages claim being pursued in the District Court against her former employer.
4. The plaintiff did not seek to file an amended statement of claim in accordance with the orders of Rothman J.

Principles

1. The order primarily sought by the defendants is that the proceedings be dismissed pursuant to r 13.4. The defendants rely on the alternative ground, that is dismissal for want of due dispatch, on the basis that if I am not satisfied that the proceedings should be dismissed pursuant to r 13.4, then I would dismiss for want of due dispatch.
2. The principles to be applied in an application for dismissal of proceedings pursuant to r 13.4 are well known. Before dismissing proceedings at this stage, I would need to be satisfied that the plaintiff's claim is so clearly untenable that it cannot possibly succeed: General Steel Industries Inc v Commissioner of Railways (NSW) (1964) 112 CLR 125 at 130; [1964] HCA 69 per Barwick CJ.
3. I must be cautious in exercising the discretion to dismiss the proceeding. I should consider the plaintiff's case at its highest: Penthouse Publications Ltd v McWilliam (Court of Appeal (NSW), 14 March 1991, unrep).
4. To the extent that the defendants seek to rely on a pleading point for the purposes of dismissing the proceedings, regard must be had to the ordinary pleading rules, specifically as set out in rr 14.6-14.8 UCPR. The pleading must be divided into numbered paragraphs and each matter must, as far as convenient, be put into a separate paragraph and numbered consecutively.
5. Perhaps more significantly for the purposes of this application, pursuant to r 14.7, a pleading must contain only a summary of the material facts on which each party relies and not evidence.
6. Plainly there is an obligation on a plaintiff pursuing a cause of action to plead the material facts on which she relies and plead the causes of action which she pursues. Having said that, as I said in Carvanna v State of New South Wales [2022] NSWSC 594 at [10] and [11]: "All persons are entitled to have access to the courts. Some leeway must be given to unrepresented litigants in terms of the way in which their causes of action are pleaded. Having said that, even though a person is unrepresented, it remains necessary for any plaintiff, unrepresented or represented, to properly plead the material facts. In many cases, a pleading drafted by an unrepresented person might be inelegantly phrased or drafted; there may be some confusion in the use of terminology and the format of the statement of claim. That may be excused but the plaintiff must still properly identify matters that are fundamental to the cause of action and of which a defendant is entitled to know so that it can properly plead to the statement of claim and prepare its case."
7. Some leeway must be given to unrepresented persons who come before the Court. They cannot be expected to be familiar with the pleading rules. However, even a person who appears unrepresented must ensure that the statement of claim sets out the material facts and identifies the causes of action so that the defendants can understand the case that has to be met. Indeed, that is the very function of pleadings. The defendants must be able to understand the case they are required to meet by an examination of the statement of claim. Similarly, a plaintiff must be able to understand the nature of a defence which is being pursued by an examination of that defence.

The background to the proceedings

1. As the plaintiff explains, prior to 2015 she was a hard-working nurse, working for her employer, enjoying her work and developing her career. She says that in 2015 she was subject to abuse, bullying and sexual abuse at the workplace. This caused her to initially cease work for a period of three months. She made a claim for workers compensation payments which was accepted, at least for part of that period. As she said today, she makes no complaint about the conduct of the Insurer during that three-month period. However, she returned to work and, as I understand the allegations, she suffered the same type of conduct at the workplace. Having spoken to her father, she decided to cease work.
2. She made a further claim for workers compensation on the basis that she was suffering from a psychological injury as a result of the things that had happened at the workplace. As she describes it, the Insurer did not accept her claim until February/March 2021. In other words, it took six years for the Insurer to accept her claim. She says that during that period she was subject to five independent reviews by medical practitioners. She says that during that period she made numerous complaints and did everything possible to convince the Insurer to accept her claim.
3. One of her main complaints is that, in rejecting her claim, the Insurer merely accepted the information provided by her employer as to things that had happened at the workplace, without seeking or considering her own views or recollection. She says that the conduct of the Insurer for this period was such that it caused her psychological injury over and above the psychological injury caused by what had happened to her at the workplace. She says that as a result of the failure of the Insurer to deal with her claim in a timely manner, that is accept her claim, she lost her house. She says that this was the home that she wanted to make for her children. She says that her condition has been aggravated to such an extent over that period that she now does not work and does not have a home. She demonstrated her distress on the hearing today.
4. She says that the point of these proceedings is to establish a precedent to demonstrate that the Insurer and the regulatory authorities cannot get away with this type of conduct. She says their conduct has caused her considerable harm and she wishes to sue them for damages. She says that she has come to this Court because she was not able to obtain redress elsewhere, that is her complaints about the regulators and the Insurer appear to have fallen on deaf ears in other places.
5. Having said that, she is also aware that there is an inquiry happening into the Workers Compensation Scheme, and as I understand it, she is awaiting the results of that inquiry.
6. In her first statement of claim she pleaded a claim only in negligence. She alleged that the Insurer and the regulators were negligent in the way in which she was treated and dealt with her claim or in the way in which the regulators failed to respond to the Insurer. As set out in Saville v Insurance and Care NSW [2022] NSWSC 1126, Rothman J struck out the statement of claim on a pleading basis, that is, his Honour was not satisfied that the statement of claim properly pleaded any cause of action on which she relied.
7. His Honour did not dismiss the proceedings pursuant to Rule 13.4. Indeed, to the contrary, he granted the plaintiff leave to file a new statement of claim by 10 October 2022. I understand that the plaintiff did not file that new statement of claim by 10 October 2022 because she was unable to obtain legal assistance to do so and it seems that it was perhaps not until this year that she was able to come to grips with the type of claim she wanted to pursue.
8. The status of the proceedings is thus that the original statement of claim was struck out and the plaintiff did not comply with the original order to file an amended statement of claim by 10 October 2022.
9. Again, assisting the plaintiff as much as I am able to in terms of procedural matters, it must thus be that she is today seeking leave to rely on the statement of claim which she has provided to the Court, dated 6 August 2023, despite the fact that it was supposed to be filed by 10 October 2022.
10. I prefer to deal with the substance of the matter, rather than deal with what I will call a procedural deficiency on the part of the plaintiff. If I was satisfied that the plaintiff's new document represented a proper pleading and provided an arguable basis to proceed, then I would have granted leave to the plaintiff to proceed.
11. Indeed, it is not that the defendants do not understand the type of case the plaintiff wishes to bring against them; it is really that they say both that the way it is drafted at the moment is not a proper pleading and, more significantly, her case is not arguable as a matter of law.

The proposed amended statement of claim

1. The proposed amended statement of claim is dated 6 August 2023. Unfortunately, it is not in the form of the original statement of claim which complied with the technical aspects of the pleading although not the matters of substance. This proposed amended statement of claim is really just a statement of the plaintiff's complaints and the sort of cause of action that she wishes to pursue and the reasons for her grievance against the defendants. Again, having said that, I prefer to deal with the matter on a matter of substance rather than a matter of form. If I was satisfied that this document could be reshaped into a document on which the parties could go forward in accordance with the rules, and provide an arguable cause of action, then I am sure that the plaintiff, given further time, may be able to reformat the document.
2. It is clear what the plaintiff wishes to allege and the basis on which she is alleging it. This is because she sets out in her proposed amended statement of claim that this is a personal injury claim for bad faith against each of the defendants. She refers to her workplace injuries, the factual background to those injuries and what happened thereafter. She then refers to the Insurer denying her claim and makes specific allegations that the Insurer did not provide a fair process to her and thus acted in bad faith. She says that the Insurer continued to deny her claim with the same unfounded dishonest reasons, ignoring solid evidence. She says that the Insurer took untruthful statements and essentially says that the insurer acted in bad faith.
3. Although there was little reference to negligence in this document, there is some reference to negligence and I will proceed on the basis that, if permitted, she would also continue to pursue a claim that the Insurer and the regulators owed a duty of care to her and that they acted in breach of those duties of care.
4. She says that she suffered loss in that she has never been provided with a case worker to help her, and the insurer deliberately hindered rehabilitation opportunities. She says that dealing with the Insurer has become a separate type of abuse.
5. It is perhaps not necessary that I go further into the lengthy document on which the plaintiff relies, except again to emphasise that the plaintiff's claim is a claim for bad faith. I take that to be a claim for a failure to act with good faith towards her.
6. The plaintiff accepts that she has no contractual relationship with any of the defendants. She says this is one of the things that must change about the workers compensation system and this is the sort of change that she is seeking to achieve through these proceedings.
7. In summary, the plaintiff, through her amended document, seeks to pursue two causes of action: one is based on alleged tort of breach of duty of good faith, and the second is on the basis that the defendants owed a duty of care to her and that they were negligent.
8. The defendants rely on affidavits from their solicitors. The plaintiff relies on extensive documentary material. I am in receipt of a four-volume court book, including the affidavits relied upon in the hearing before Rothman J, earlier submissions and extensive submissions from the parties.

Determination

1. Having heard from the plaintiff, it is quite clear what the nature of her grievance is and what she hopes to achieve through these proceedings. She has clearly been distressed as a result of the processes and, having suffered an injury at work in 2015, finds herself in a very difficult position. Whether that be because of the conduct of the defendants or because of the original things that happened to her at the workplace would be an issue in the proceedings in due course. For the purposes of this judgment only, I accept that the plaintiff suffers from distress and psychological injury at the present time and that she has suffered significant losses in the last eight years.
2. Whether any of the defendants acted in the way the plaintiff maintains or whether any of the defendants caused these losses would be a matter for a hearing. Again, the plaintiff accepts that. The plaintiff accepts that I am not engaged in a hearing of the facts at this stage. That is to the benefit of the plaintiff because the defendants accept that, in determining their applications, I must proceed on the basis that at least some of the facts asserted by the plaintiff are reasonably arguable or may be proven. The defendants have not served any evidence on this application from lay witnesses or people who are involved in the claims.
3. The plaintiff did not comply with the earlier orders of Rothman J and there is consequently no statement of claim on foot at the present time. The defendants oppose the filing of the document of 6 August 2023 on the basis it is not in a form which complies with all the rules in respect of a pleading. I accept that.
4. The question then becomes what orders should be made at this time. On one view it would be possible to dismiss the proceedings for want of due dispatch, but that may be unfair to the plaintiff bearing in mind the difficulties she has had obtaining legal representation and the psychological distress from which she suffers.
5. Rather, in my view, the appropriate course is to deal with the matter under r 13.4, which is in the following terms: (1) If in any proceedings it appears to the court that in relation to the proceedings generally or in relation to any claim for relief in the proceedings-- (a) the proceedings are frivolous or vexatious, or (b) no reasonable cause of action is disclosed, or (c) the proceedings are an abuse of the process of the court, the court may order that the proceedings be dismissed generally or in relation to that claim. (2) The court may receive evidence on the hearing of an application for an order under subrule (1).
6. I have already identified the principles which must be applied. The question is whether the causes of action which the plaintiff wishes to pursue (perhaps more properly set out in a better document) are so untenable or unarguable that the proceedings should be dismissed at this time, even assuming there was some merit in the allegations of fact (which I am not determining or even commenting on at this time).
7. The problem for the plaintiff is that she is seeking to pursue causes of action which higher courts than this have said are simply not available to her. As I explained to her during her submissions, the law in New South Wales does not recognise the sort of case that she wishes to pursue. Indeed, in CGU Workers Compensation (NSW) Limited (ACN 003 181 002) v Garcia (2007) 69 NSWLR 680; [2007] NSWCA 193 ("Garcia"), the Court, per Mason P (Hodgson and Santow JJA agreeing) confirmed that there was no case in New South Wales which supports the existence of a tortious duty of good faith: see Gibson v Parkes District Hospital (1991) 26 NSWLR 9 ("Gibson").
8. When the plaintiff says she is pursuing a claim for bad faith, that must be a claim based in tort. The only torts she pursues are the alleged torts of good faith and negligence. This type of claim was the type of claim considered by the Court of Appeal in Garcia. The argument she seeks to run was rejected by the Court of Appeal. There may be some in the insurance industry who would support her claim that insurers owe a duty of good faith to claimants but, as I explained to the plaintiff, my role is to determine the case according to law. It is up to the Parliament to make new law. The common law develops in Australia incrementally and the High Court may consider this issue at some stage in the future. However, I am bound by existing law.
9. There is no case which supports the proposition that an insurer such as the Insurer owes a duty of care to the plaintiff, that is, a conventional negligence-type duty or a duty of good faith to the plaintiff (absent a contractual arrangement).
10. In some circumstances on an application such as this the Court should consider whether the development of the law over time might allow for incremental changes or might allow for the development of a new tort. However, at least at this time the law is clear and nothing said by the plaintiff convinces me that the nature and circumstances of this case are such that there is any basis on which I could distinguish her case from the principles set out in cases such as Garcia.
11. I have had regard to what was said by Badgery-Parker J in Gibson but, again, that was also dealt with in Garcia and other cases.
12. In the circumstances, the causes of action which the plaintiff wishes to pursue are not reasonably arguable. Her case is untenable and bound to fail.
13. It follows that the plaintiff is refused leave to file her proposed amended statement of claim; the only appropriate order is that the proceedings be dismissed pursuant to r 13.4 and I make that order.
14. The defendants seek costs of the motion and costs of the proceedings. The plaintiff submits that she has lost everything and will go bankrupt. No doubt those are matters which give rise to great sympathy but, as I must apply the law, the defendants have been successful and, in those circumstances, costs follow the event. I order that the plaintiff pay the costs of the motion and the costs of the proceedings.

Amendments 08 December 2023 - Costs order added to coversheet and paragraph [48]. DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 08 December 2023